A pro bono project that prevents poverty? Now that's impact!

How can I get you to read this article once you tumble to the fact that it is about dividing marital assets following a divorce? Yawn! Time to check your Insta instead, right?

But what if this piece is actually about selfless pro bono dedication that has an outsized impact? The kind of project that you tell yourself you too aspire to undertake someday if you only had the time and know-how? What if the article described two lawyers who saw vulnerable elderly women with no access to justice, saw nobody was doing much about it, and just up and decided to fix the problem? What if you learned how you can help desperate people by making a simple referral? If so, would reading this be worth four minutes of your time? I say take a chance and read on.

For a vast proportion of the divorcing population, there really is not much property to divide up. Maybe there is some equity in a house and maybe some modest amounts in a joint bank or brokerage account. Property acquired during marriage is presumptively community property, and the basic rule is that it is divided 50-50 upon the dissolution of that marriage. So far, so good: no big problem dividing up those assets.

But for many couples, the forced savings features of retirement accounts mean that those accounts are where a meaningful bulk of parties' money resides at the time of the divorce. And now they really need it. In their once-unified household they may have been just able to keep their financial noses above the water, but now that they are going their own ways (two apartments; two phone bills; etc.), they have to get their hands on those funds. 

So, just divide it up--what's the problem? The problem is that because of federal retirement (ERISA) and tax laws, "just divide it up" requires arcane and esoteric specialized knowledge, and specialized court orders--something called a qualified domestic relations order or "QDRO." Preparing a valid and enforceable QDRO is really complicated. For example, who or what is the "alternate payee" under a retirement plan? And consider this from the federal Department of Labor's "general guidance" about QDROs: "The order must not require a plan to pay benefits to an alternate payee that are required to be paid to another alternate payee under another order previously determined to be a QDRO." Say what!? You might be surprised to learn that most family law lawyers either don't know how to prepare a QDRO or choose not to. That's problem enough.

But most family law litigants, upwards of 75%, do not have lawyers; they are representing themselves, to the best of their abilities, in the labyrinthine, non-intuitive, world of family court. Courts' self-help center personnel are unsung miracle worker heroes in their service to the public but there is no way they have the means to train self-represented litigants how to prepare a valid QDRO. The upshot? The money sits in an undivided retirement account, tantalizingly close but unavailable to its owners. Where can self-represented litigants go to get a QDRO and thus access to their own money? Short answer: basically, nowhere. A colossal crisis in access to justice with no solution. Oh well; too bad, so sad; time to avert our eyes and think about something else.

Unless you are Carrie Holmes and Louise Nixon, for whom eye-averting was not an option. Starting from nothing more than their refusal to accept an unacceptable status quo, they established their 503(c)(3) pro bono Center for Access to QDROs ("the Center") with its elegant website, QDROCenter.org. Carrie is the Center's Executive Director and Louise its QDRO uber-expert and President of the Center's Board of Directors.

Carrie explains: "Imagine you're living in your car, taking out loans with predatory interest rates to keep yourself fed and clothed. You're haunted by the knowledge that funds which belong to you and could provide much-needed income are just beyond your reach. You were awarded your rightful share of a retirement benefit at divorce, but the retirement plan administrators say they cannot pay until you have a proper QDRO. It costs thousands of dollars at market rates to have one prepared. You try to do it on your own, but the plan or the court rejects it, repeatedly. Your financial lifeline is trapped behind bewildering legalese. Many working people must destroy what minimal wealth they've been able to save to stay afloat during the divorce process, finding themselves living in poverty and forever changed economically by the experience. Increasing access to retirement benefits for people experiencing poverty generates a radical difference in their current and future economic stability."

Louise has spent more than 30 years focused on retirement division in divorce, first as a retirement plan attorney and then with her own law firm (now inactive). She has long been a national QDRO expert, quoted in the New York Times, on Bloomberg and MSNBC, and in the Wall Street Journal. Since 2004, Louise has prepared QDROs pro bono for the Harriett Buhai Center for Family Law ("Buhai Center"), a non-profit which provides free family law legal services in Southern California and has served on its Board and Advisory Council. Louise says, "Based on my 30-plus years of experience, it became quite clear early on that the current paradigm to divide retirement benefits in divorce is completely broken. A huge number of litigants do not realize that they need a QDRO to divide retirement benefits. They believe that their judgment is sufficient, and are dismayed to learn, sometimes many years after their divorce when they are in dire financial straits, that they cannot access their retirement benefits until they obtain a QDRO. Many give up, either because they do not know where to go to get a QDRO or they cannot afford to have one prepared. It is clear that the current system is not a functional paradigm to implement the division of retirement benefits for everyone."

She adds, "Depending on the year, there are approximately one to two million divorces each year in the U.S. However, there are only approximately forty retirement benefit division professionals in the nation providing QDRO services for charge. There are zero systematic programs available to assist low-income persons who need a QDRO other than the Center for Access to QDROs."

Is the Center's work a big deal? Here's what some experts have to say:

 
"I have been hoping for a project like this for 25 years. It is a great tool for legal aid to prevent poverty," says Bonnie Rose Hough, former Principal Managing Attorney for the Center for Families, Children & the Courts of the Judicial Council of California. Jennifer Anders-Gable, Regional Counsel, Western States Pension Assistance Project, Legal Services of Northern California says, "The Center for Access to QDROs is an invaluable resource to our low-income clients who are one court order away from increased income security. Most of our pension clients are unable to hire an attorney or understand the interplay between a retirement plan and their divorce case, and without a [QDRO], they're unable to access valuable community property, which for many older adults, is a big difference in meeting monthly expenses. For the first time in our 15 years of statewide pension counseling services, we have a valuable resource for QDRO support and services, and it has been a game changer for our clients - and our staff!"  One more: "The Center for Access to QDROs is instrumental in ensuring that family law attorneys understand the QDRO process, laws, and potential relief available to our clients. They go above and beyond by answering all QDRO-related questions to assisting our clients with their QDRO needs. They are a crucial resource that is a game changer for the most vulnerable family law clients," says Marisol Ornelas, CFLS, Family Law Supervising Attorney, Legal Aid Society of San Diego.

The Center arose from an earlier partnership between the Buhai Center and QDROCounsel, LLC, a legal technology company for the retirement division. In 2021, the Buhai Center applied for funding through the California State Bar's Access to Justice Commission to begin a substantive training program for legal aid and self-help center attorneys across California to learn about retirement benefit division at divorce and provide use of QDROCounsel's innovative software platform, free of cost, to conduct Plan research, advise their clients about their rights, and draft QDROs. It was a remarkable success. The Center was established shortly thereafter. Adam Martin, QDROCounsel's CEO and co-founder, is also on the Board for the Center. He sees his work as a Board member and QDROCounsel's donations to the Center as part of QDROCounsel's commitment to Corporate Social Responsibility. In his words, "working closely with the Buhai Center and Louise Nixon through the years is the reason we felt we could do something substantial in raising indigent people out of poverty."

A major achievement for the Center is its recent successful application for IOLTA (interest on legal trust accounts) funding from the California State Bar. Carrie and Louise explain, "We applied for funding as a "support center" - an organization that assists other legal aid organizations with an aspect of their work, usually in a specialized area of the law. In order to receive this funding, we underwent a "deeming" process where the legal services projects in California voted on whether we meet a "special need" for them. A majority of the legal aids needed to vote yes, and not voting counts as a no. We are thrilled to report that we were deemed, which means that the other legal aid organizations recognize the great need for our services amongst their client communities, and have found the services we've provided in the last year to be helpful to them." They add, "While IOLTA was a significant objective for 2024, we are always looking for other sources of funding as well."  

Preventing poverty; game-changer; crucial resource. Big words to attach to a pro bono effort. Carrie Louise, Adam and their team saw a terrible problem and had the gumption and skill set to try to make it and our world a little better. Imagine what could be done if we all showed such courage.